If you rent a house or apartment, your landlord’s insurance will only cover the costs of repairing the building if there is a fire or other disaster. You need your own coverage, known as renters or tenant’s insurance in order to financially protect yourself and your belongings.
Renters insurance includes three important types of financial protection:
The following checklist can help you choose the right coverage when you are shopping around for renters insurance or speaking with an insurance agent or company representative.
How much insurance should I buy?
Make sure you have enough insurance to replace all of your personal possessions in the event of a burglary, fire or other covered disaster. The easiest way to determine the value of all your personal possessions—including furniture, clothing, electronics, appliances, kitchen utensils and even linens—is to create a home inventory. This is a detailed list of all of your personal possessions along with their estimated value. An up-to-date home inventory will also make filing an insurance claim faster and easier.
The Insurance Information Institute offers free Web-based home inventory software, available at www.knowyourstuff.org.
Should I get replacement cost or actual cash value coverage?
An actual cash value policy pays to replace your possessions minus a deduction for depreciation whereas a replacement cost policy will pay the cost of replacing your possessions without accounting for depreciation. The price of replacement cost coverage is about 10 percent more but can be well worth the extra expense as the value of most items tends to depreciate quickly.
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